Yuko Kawai, Head of fintech sector, Bank of Japan

Please give us a bit of background on yourself, and how your organisation plays a leadership role in the financial technology space.

I joined Bank of Japan after having worked in the private sector, first at a large American financial institution and then at a startup venture company. Since I was assigned to the fintech job 6 months ago, I have continuously been excited with the rapid and promising developments.

Bank of Japan, the central bank, is naturally interested in any kind of fintech as each segment relates to one of our functions. Major focuses are on payments and currencies. In addition, as an overseer of financial system and market, we seriously observe supporting or disrupting technologies to incumbent financial institutions and/or to traditional financial markets. We ourselves conduct researches, and constantly facilitate the information exchanges internally and externally. We are trying to become one of the information hubs in fintech.

How well are financial companies adapting to the coming of age phase of fintech development? Where are the opportunities, and where are the roadblocks still?

In Japan, most of the incumbent financial institutions are still at their early stage to launch fintech services and products. Problems to be solved in Japan’s finance services are multi-folded – first of all, many incumbent banks might need to redesign their thinking to be “client-first” and raise their productivity to meet client satisfaction. Inefficiency also lies on the side of their clients, corporations and individuals, as their financial information is not well digitized. Capturing the state of financial health by numbers and accumulating data for analysis will certainly improve the efficiency of the Japanese economy overall. To reach such a goal, we need to overcome many blocks, amongst which, the toughest one will be how to break the inertia of current business norms.

What challenges do you see for fintech maturation, and how will their business models help deliver future financial success?

Fintech in Japan is not anywhere near the maturation yet. I myself cannot clearly picture the road to success, although I am confident that some of the startups or fintech projects managed by incumbents will be sustainably successful.

What will you be discussing at The Economist's Finance Disrupted Conference?

Since one of the challenges in the Finance industry in Japan is the relatively low productivity of financial institutions, the introduction of technologies to improve them will be highly appreciated. Whether it is disruptive or collaborative to incumbent banks does not matter; however, it often is the case in Japan that meaningful changes can only be produced by disruption. Needless to say, we would not want excess volatility in the system to expose our economy to the downside risk, therefore timely regulations and monitoring would be required. On the other hand, we need to be mindful not to kill the innovation by making rules too tight. Balance is what I would like to emphasize – not too accommodative, not too rigid.